Should You Add Rogers Communications Inc. (USA) (RCI) to Your Portfolio?

Insider Monkey finished processing more than 700 13F filings made by hedge funds and prominent investors. These filings show these funds’ portfolio positions as of September 30. What do these smart investors think about Rogers Communications Inc. (USA) (NYSE:RCI)?

Rogers Communications Inc. (USA) (NYSE:RCI) saw an increase in hedge fund sentiment during the third quarter. There were 14 hedge funds in our database with RCI holdings at the end of September. However, the level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as Hess Corp. (NYSE:HES), Dr Pepper Snapple Group Inc. (NYSE:DPS), and United Continental Holdings Inc (NYSE:UAL) to gather more data points.

At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 18% gains over the past 12 months, more than doubling the 8% returns enjoyed by the S&P 500 ETFs.

With all of this in mind, let’s take a look at the recent action surrounding Rogers Communications Inc. (USA) (NYSE:RCI).

How are hedge funds trading Rogers Communications Inc. (USA) (NYSE:RCI)?

At the end of the third quarter, a total of 14 of the hedge funds tracked by Insider Monkey held long positions in Rogers Communications, up by 40% over the quarter. On the other hand, there were a total of 16 hedge funds with a bullish position in RCI at the beginning of this year. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, AQR Capital Management, led by Cliff Asness, holds the biggest position in Rogers Communications Inc. (USA) (NYSE:RCI). AQR Capital Management has a $48.4 million position in the stock, comprising 0.1% of its 13F portfolio. The second most bullish fund manager is McKinley Capital Management, led by Robert B. Gillam, holding a $39.9 million position; the fund has 1.4% of its 13F portfolio invested in the stock. Some other peers that hold long positions encompass Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital, Mario Gabelli’s GAMCO Investors, and Renaissance Technologies, one of the largest hedge funds in the world. We should note that none of these hedge funds are among our list of the 100 best performing hedge funds which is based on the performance of their 13F long positions in non-microcap stocks.

Now, some big names were breaking ground themselves. McKinley Capital Management established the biggest position in Rogers Communications Inc. (USA) (NYSE:RCI). Ray Dalio’s Bridgewater Associates also initiated a $15.7 million position during the quarter. The following funds were also among the new RCI investors: Brad Dunkley and Blair Levinsky’s Waratah Capital Advisors, Israel Englander’s Millennium Management, and Alec Litowitz and Ross Laser’s Magnetar Capital.

Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Rogers Communications Inc. (USA) (NYSE:RCI) but similarly valued. We will take a look at Hess Corp. (NYSE:HES), Dr Pepper Snapple Group Inc. (NYSE:DPS), United Continental Holdings Inc (NYSE:UAL), and Under Armour Inc (NYSE:UA). All of these stocks’ market caps are similar to RCI’s market cap.

As you can see these stocks had an average of 40 hedge funds with bullish positions and the average amount invested in these stocks was $1.93 billion. That figure was just $200 million in RCI’s case. United Continental Holdings Inc (NYSE:UAL) is the most popular stock in this table. On the other hand Under Armour Inc (NYSE:UA) is the least popular one with 28 bullish hedge fund positions. Compared to these stocks Rogers Communications Inc. (USA) (NYSE:RCI) is even less popular than Under Armour Inc (NYSE:UA). Considering that hedge funds aren’t fond of this stock in relation to other companies analyzed in this article, it may be a good idea to analyze it in detail and understand why the smart money isn’t behind this stock. This isn’t necessarily bad news. Although it is possible that hedge funds may think the stock is overpriced and view the stock as a short candidate, they may not be very familiar with the bullish thesis. In either case more research is warranted.

Disclosure: none